How to read a Bank of England Monetary Policy Report
The Bank of England publishes a Monetary Policy Report (MPR) four times a year with detailed inflation forecasts, fan charts, and the MPC's full economic assessment. Here's what to look for and how to interpret it alongside the rate decision.
Four times a year — in February, May, August, and November — the Bank of England publishes its Monetary Policy Report. Unlike the ECB or Fed, the BoE produces a detailed, standalone publication with explicit probability fan charts for inflation and GDP growth. It is the most transparent regular communication of any major central bank's thinking.
The MPR is published simultaneously with the rate decision and MPC vote. Reading it correctly requires understanding both the numbers (what the BoE forecasts) and the language (how confident it is, and where the risks lie).
Start with the rate decision and vote split
The MPR is always published alongside the rate decision. Before reading the report itself, note the Bank Rate decision and the MPC vote split. The vote is 9 members — a 9-0 decision means strong consensus; a 5-4 split means the committee is genuinely divided and the next meeting is live for a change. The November 2026 decision (see the event page) is particularly important as it is an MPR meeting — the committee publishes updated forecasts alongside the rate vote.
The vote split tells you more about the forward path than the current decision. A hold with three dissenters (wanting to cut) is functionally equivalent to "we expect to cut at the next meeting if conditions allow." Use the vote to calibrate how data-sensitive the next meeting is.
Read the fan charts: the BoE's probability forecasts
The most distinctive feature of the MPR is its fan charts — probability distributions for CPI inflation and GDP growth, not just central forecasts. The fan chart uses different shades to represent the 90%, 75%, and 50% credible intervals of the forecast. The central forecast (darkest area) is the median. The fans represent genuine uncertainty.
What to look for in the inflation fan chart:
- Is the central forecast above or below 2% at the 2-year horizon? If above, the MPC sees persistent inflation; if below, it may be concerned about undershooting.
- Is the fan skewed? If the upper half of the fan is wider than the lower half, the MPC sees more upside than downside risks to inflation. This is explicitly discussed in the "balance of risks" section.
- What does the forecast look like at the 3-year horizon? This shows where the MPC expects inflation to settle in the medium term.
The fan chart is conditioned on market-implied interest rates (what the market expects the BoE to do). If the market expects three more cuts in 2027 and the fan chart still shows inflation above target at 2 years, that is a hawkish signal — it implies those cuts would not fully return inflation to target.
Find the services CPI forecast — the key domestic signal
Within the MPR, the services CPI outlook is the critical section for understanding the BoE's domestic inflation assessment. The MPC separates its inflation analysis into: energy, goods, and services. Services is the hardest to forecast (it's wage-driven and slow-moving) and the most important for monetary policy (because it's what rate changes can actually influence).
The key questions to answer from the services section:
- What does the MPC forecast for services CPI at the 1-year, 2-year, and 3-year horizon?
- Has the services forecast been revised up or down compared to the previous MPR?
- What are the key wage assumptions underlying the services forecast? (Usually discussed in the labour market section.)
For context, services CPI needs to fall toward 3.0–3.5% for headline CPI to return sustainably to 2% — given that goods is already near deflation. See our services vs goods explainer for the arithmetic.
Check the key judgements and risk balance
Each MPR includes a section on "Key judgements" — the major assumptions the MPC has made where reasonable economists could disagree. These are the "swing factors" in the forecast. Common key judgements include: the extent of labour market loosening; whether firms will cut prices as costs normalise; the speed of services disinflation; and the path of energy prices.
The "Risk balance" section describes whether the MPC sees upside or downside risks to its central forecast. An MPR that describes "upside risks" to inflation means the committee is more worried about inflation being higher than forecast than lower. This is hawkish. One that describes "downside risks" — or that describes the risks as "broadly balanced" — is more neutral or dovish. This language directly informs the next meeting's rate decision.
Compare the current MPR with the previous one
The MPR is most informative when read comparatively — what has changed since the last report? The BoE publishes a summary table of forecast changes. Look for:
- Revisions to the 2-year CPI forecast: An upward revision (e.g., 2.1% → 2.4%) is hawkish and likely associated with a slower cut path.
- GDP growth revisions: A downgrade to growth implies more slack, supporting faster rate cuts. An upgrade suggests the economy can handle higher rates longer.
- Wage growth revisions: The single biggest driver of services inflation revisions. If the wage forecast is revised up, services CPI will be revised up, and the cutting cycle will be slower.
Use the inflation explorer to track current UK CPI alongside the BoE's forecast path — and our guide to comparing central bank targets to put the BoE in international context.